How to go about hiring an Investment Advisor

Working hard, along the years you might have saved a handsome amount of money OR if you were born with a silver spoon, you would have enough assets to worry about. You may think of investing it wisely to enjoy good returns, ensure a secure cover for your dependents and arrange for a regular source of returns to them in case of your death OR simply need help on the complexities of Taxation, stock market or retirement plans. That is when most of us realize the need for professional financial guidance. Now that you've realized you need an investment advisor, take time out to do some research on how to hire one, think about the pros and cons and be sure of 'Why' you need him.

Here's how you can approach the question of whether you need an investment advisor or not:

1. What is your financial status?

May be you do not need an investment advisor at this stage. Investing money into retirement plans, stock market or even in balanced funds would need you to feed them with regular fee or premiums, which is not small money. Therefore, weigh your current income levels, saving funds and future targeted savings and then decide whether or not will you be able to handle the regular pressure of investments and premiums. Consider the value derived from these investments in relation to your actual savings to date.

2. Do you have time to make decisions?

Hiring an investment advisor is not a magic wand who would swipe away your financial woes in a blink of the eye. It is going to be a mutual effort between you and your advisor, where you will have to spare time for discussions and make decisions on how you wish to move ahead on his recommendations. Many people hire an advisor and then are unable to maintain a regular communication with him and lose touch. So, give it a good thought. Doing your finances yourself is not bad at all, it can be quite interesting and you might be successful with some research combined with small free advice here and there. If you actually want to buy and receive advice, communication on a periodic basis is a must.

3. What are your goals for your money?

More than often, people have unrealistic or dreamy goals for their investments or else their goals are very vague with no quantification or metrics. For example- "I want to retire comfortably or I want to live big" are common notions. Being concrete about the goals is essential, like "I plan to retire before 60 and start a farm, need funds for the farm, cover inflation and support my children some legacy for my two children" is much clearer. An investment advisor can help you further refine your goals and get you on the path to realize them.

4. Do you have complex or simple investments?

People believe that complex investments have more chances to give higher returns and jumble up collections of with no rhyme or reason. Then they further add investments of real estate or businesses to their portfolio. Managing such a complex model not only is very difficult but also takes away the balance from your financial situation. Achieving your goals would be a more relishing experience with some simplification. Your financial advisor can surely handle the complexities, but it's quite possible that you may never be able to get a hang of things and be over-dependent on your advisor. Hence keep things simple.